Global database management system giant Oracle Corp. revealed that it has laid off 21,000 employees in the past 12 months. Surprisingly, some of those positions have been completely replaced by artificial intelligence (AI) technology.
In the company's annual financial report released on Monday, Oracle openly acknowledged this.
"The use and implementation of AI technology in our operations has caused, and may continue to cause, a reduction in our workforce," Oracle explained.
Here are the key facts behind this large-scale reduction in staff:
1. Headcount Shrinks 13%
As a result of these large-scale layoffs, Oracle's global full-time staff has now shrunk to 141,000 (as of fiscal year-end May 31), compared to 162,000 a year earlier.
This workforce is now lower than before Oracle bought electronic health records company Cerner in 2022 for $28 billion.
2. Billions of Ringgit Cost for ‘Restructuring’
This layoff measure is not cheap. Oracle had to bear very high restructuring costs, reaching around $1.8 billion (around RM8.5 billion). As of the end of May, Oracle had about 49,000 employees in the US and 92,000 employees internationally.
3. Why is Oracle Urgently Wanting to ‘Cut’ Employees?
The main reason is financial pressure. Oracle is currently investing heavily and spending a lot of capital to build AI data centers to meet the demands of their giant customers, including OpenAI.
To cover the cost of building this expensive AI infrastructure and maintain the company’s cash flow, Oracle had to lay off thousands of its employees earlier this year, although the exact amount of the cuts has never been officially disclosed before.
This issue proves that the threat of AI replacing human jobs is no longer just empty talk, especially in the technology sector. For Oracle (ORCL) stock investors, this cost-cutting move to invest in AI may be seen as positive for long-term profit margins, but it sends a clear signal about the changing landscape of the future of work.
Which giant company will replace its staff with AI next?
